Ebene News – AU – China and EU Leaders reach investment deal, but political hurdles await

The deal, which would cancel restrictions on investments, faces some opposition in Europe and objections from the Biden camp

Chinese and European Union leaders agreed on Wednesday to make it easier for companies to operate in each other’s territory, a significant geopolitical victory for China at a time when criticism of its human rights record and the management of the pandemic left her increasingly isolated

But the historic pact faces political opposition in Europe and Washington that could ultimately derail it, illustrating the difficulties of dealing with an authoritarian superpower that is both an economic rival and a lucrative market.

A large faction in the European Parliament, which must ratify the deal before it can go into effect, opposes the deal on the grounds that it is not doing enough to stop human rights violations man in China In addition, one of the main aides of President-elect Joseph R Biden Jr has signaled that the incoming administration is not happy with the deal

German Chancellor Angela Merkel has made the deal a priority because of its importance to German automakers and other manufacturers with large operations in China

The pact eases many restrictions on European companies operating in China, including the requirement that they operate through joint ventures with Chinese partners and share sensitive technologies

The deal also opens China up to European banks and contains provisions to reduce covert government subsidies Foreign companies often complain that the Chinese government is secretly subsidizing domestic companies to give them a competitive advantage

The deal “will significantly improve the competitive environment for European businesses in China,” Hildegard Müller, chairman of the German Automobile Industry Association, said in a statement ahead of the announcement “This will give new impetus to a global rules-based framework for trade and investment”

Chinese leader Xi Jinping has also made closing the deal a priority, allowing negotiators to make enough concessions to persuade Europeans to move forward

Wednesday’s announcement was preceded by a video call to which Mr. Xi and Ursula van der Leyen, President of the European Commission, agree in principle on a deal

EU officials said a breakthrough took place in mid-December when China, in a major concession, agreed to make a stronger commitment to upholding international standards on forced labor China has also agreed to step up efforts to tackle climate change

Valdis Dombrovskis, the European trade commissioner, said the deal was “the most ambitious” pact of its kind that China has ever agreed to

“But the value of the deal goes beyond the euro and the penny, as it also anchors our value-based trade agenda with one of our largest trading partners,” Mr. Dombrovskis said in a statement Wednesday

The conclusion of the pact is now a diplomatic victory for China, which has seen its international reputation shaken by its handling of the coronavirus pandemic and its crackdowns in Hong Kong and in the predominantly Muslim province of Xinjiang

These issues – and mistrust of China’s promises to truly open up to foreign investment – became the center of opposition to the deal as final details were flattened For the Chinese, the agreement demonstrated that the country does not face significant diplomatic isolation over its management of human rights

China also seemed keen to reach a deal before Mr. Biden takes office in January, saying closer economic ties with the Europeans could prevent the new administration from proposing an allied strategy to challenge China’s trade practices and other policies

Mr. Biden, in a speech Monday, said that on any issue that mattered to the US-China relationship, the US is “stronger and more effective when we are flanked by nations that share our vision of the future of the world “

Currently, he said, there is “a huge void” in American leadership “We are going to have to regain the confidence of a world that has started to find ways to work around us or without us “

The White House also opposed the deal but had little influence among Europeans to block it The Trump administration tried for months to isolate China and its companies – announcing this week of new restrictions on people linked to the People’s Liberation Army – to be disowned by countries still ready to engage the Chinese

The Europeans’ decision to ignore Camp Biden’s objections was an indication that relations with the United States would not automatically revert to the relative bonhomie that prevailed under the Obama administration

President Trump’s penchant for burning bridges with longtime allies has caused Europe to largely ignore the United States as it pursues trade deals with countries like Japan, Vietnam and the United States. Australia EU diplomats said this week that while they hope for a more cooperative relationship with the Biden administration, they cannot subordinate their interests to the US electoral cycle

Members of the European Green Party, among others, say the deal does not do enough to open up Chinese markets, to honor previous promises on trade and the environment, or to tackle human rights violations. man, including forced labor and massive internment of Uyghurs and other Muslims in the far western region of Xinjiang

Opponents may be able to muster enough votes to block ratification in the European Parliament

Negotiators for China and the European Union have been working on a deal for almost seven years, but progress suddenly accelerated after Mr. Biden defeated M Trump in the election

Unlike Mr. Trump, who has often been hostile to Europe, Mr. Biden is expected to try to cooperate with the European Union to curb Chinese ambitions, but these efforts could take several months to materialize

US law prohibits members of the incoming administration from negotiating directly with foreign officials until Mr. Biden is sworn in on January 20 In an interview in early December, Mr. Biden said he plans to conduct a full review of trade relations with China and consult with allies in Asia and Europe to develop a cohesive strategy before changing US terms of trade.

Meanwhile, M Biden’s advisers have used public statements to warn EU officials against rushing action and to try to persuade them of the benefits of waiting to coordinate with the new US administration

Mr. Biden’s choice as national security adviser, Jake Sullivan, wrote on Twitter this month that the new administration “would welcome early consultations with our European partners on our common concerns regarding the economic practices of China”

Chinese officials have been pushing to keep the deal on track in recent weeks, particularly after opposition in Europe spilled over into public

As talks hit a snag last week, China’s Ministry of Commerce said in a statement that the deal would be “of great importance for the recovery of the global economy.” He said the two sides should be willing to “meet halfway”, but that China would protect “its own security and development interests”

Despite the terms of the forced labor deal, Chinese officials have repeatedly denied that the country engages in the practice – in Xinjiang or elsewhere – despite evidence to the contrary The vehemence of these denials raises questions about how China could be held to honor its commitments to protect workers’ rights

“So-called forced labor in Xinjiang is a complete lie,” Foreign Ministry spokesperson Wang Wenbin said recently. “Those responsible for these despicable slanders should be condemned and held accountable”

China, European Union, Xi Jinping

Ebene News – AU – China and EU Leaders strike investment deal, but political obstacles await

Source: https://www.nytimes.com/2020/12/30/business/china-eu-investment-deal.html